Joe TetreaultThe Biz of Baseball, part of the Business of Sports Network. From contracts to stadiums, television to radio, if it's baseball outside the diamond, we cover it.http://www.bizofbaseball.com/index.php?option=com_content&view=category&id=83&Itemid=192
Sun, 02 Aug 2015 22:27:37 +0000Joomla! 1.5 - Open Source Content Managementen-gbLooking Past the Rhetoric: Fox' Fight With Cablevision is About the Future of Content Deliveryhttp://www.bizofbaseball.com/index.php?option=com_content&view=article&id=4822:looking-past-the-rhetoric-fox-fight-with-cablevision-is-about-the-future-of-content-delivery&catid=83:joe-tetreault-article-archive&Itemid=192
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NYC and Philly Held Hostage, Day 13

The siege between News Corp and Cablevision drags through its second week. With New York and Philadelphia not getting their local Fox stations and in New York's case, their News Corp owned MyTV affiliate as well, the two media titans are slugging it out in a fashion that would make the Transformers in full metorpolitan destruction mode cringe. Sadder still, the havoc their battle is wreaking on viewers damages their brand in ways that at least one of them cannot sustain.

At stake tonight is Game 1 of the World Series, scheduled for Fox and likely to be unavailable to Cablevision subscribers in the metropolitan areas of New York and Philadelphia. The issue would be at a fever pitch if the Yankees and Phillies advanced to the Series, which I suspect was the leverage Fox wanted to use to gain concessions from Cablevision.

Cablevision, however, is hardly in a position to hold out on programming to its subscribers. They lack the brand loyalty that programming on Fox has earned. Viewers recognize this. Witness the fury of soon to be former Cablevision subscriber Joe Pawlikowski, Baseball writer and media watcher extraordinaire:

Tweet 1: "Cablevision is forcing customers to pay for channels they are not receiving. How do they expect to keep customers?"

Tweet 3: "I will also encourage everyone I know to switch off Cablevision. There is no reason for consumers to be treated this way."

Joe makes a very good point. In their quest to win, Cablevision is damaging their brand in horrible ways. Fox is insulated from this in many ways by exposing the fundamental flaw of the current method of television delivery. Viewers want the product that Fox provides, they don't care much about the company that serves to deliver the product. That reality alone makes Cablevision's position entirely untenable and explains their eagerness for remediation.

Fox understands their customers are their advertisers, not their viewers. Television programming is a by-product of advertising distribution. As such, garnering more fees from their distribution is merely revenue enhancement and business diversification. As long as their programming can draw viewers, their advertisers won't flinch, even with the temporary loss of parts of markets like Philadelphia and New York.

The programming still draws viewers. Baseball fans like Joe and I may not like Joe Buck and Tim McCarver calling baseball games, but we like baseball games, and these games are the most important games of the year. So we watch. The product, even with its flaws still accommodates our yen for the greatest game played. Similarly, shows like Glee, Fringe and American Idol when it returns have strong audiences. And then there is the NFL, the 600 pound gorilla in the room.

Cablevision by contrast provides a service. They deliver Fox' programming to people's homes. People don't like buying services. They prefer buying results. If they contract a company to deliver television programming, it better do so. Cablevision's value added is convenience. And when their actions prove inconvenient, their viewers seek alternatives.

For many years, when cable companies operated as monopolies, the alternatives were few. While they need not compete with other local cable companies, they do deal with competition from telecommunications providers like AT&T (and their U-verse service) and Verizon (FIOS) as well as Satellite companies like DirecTV and Dish Network.

More worrisome for cable companies is the potential for disintermediation via the Internet. MLB.tv was the first instance of a league selling broadcasts direct to fans. Sites like Hulu (co-owned by News Corp and NBC Universal) can deliver television programming direct to consumers bypassing the cable companies and their competitors. In addition Apple, Netflix and Amazon offer streaming options that can be viewed with set top boxes or video game systems. Roku's set-top boxes which stream Netflix, Amazon as well as MLB.tv, will soon add Hulu, and the full disintermediation will have begun.

As a result of the weakness of their position, Cablevision holds out hope that mediation will settle the issue. Fox, for its part, has no desire to seek mediation, as a mediator will force both parties to accept concessions, concessions Fox feels they need not make.

This move by Fox to gain a greater piece of subscriber fees is geared towards using the cable companies to finance building an infrastructure to go direct. By continuing this fight, Cablevision is antagonizing their suppliers and their customers. Never a particularly good recipe for staying in business.

Using sporting events -- especially the World Series -- to gain leverage shows how little Fox actually needs any cable company. The delivery of sporting events to consumers will be transformed in the next decade. This is but the first skirmish in what will prove to be a technological revolution.

]]>tetreaultvision@gmail.com (Joe Tetreault)Joe Tetreault Article ArchiveWed, 27 Oct 2010 05:00:00 +0000Re-Ranking the Top 10 Markets for Relocation or Expansionhttp://www.bizofbaseball.com/index.php?option=com_content&view=article&id=4700:re-ranking-the-top-10-markets-for-relocation-or-expansion&catid=83:joe-tetreault-article-archive&Itemid=192
http://www.bizofbaseball.com/index.php?option=com_content&view=article&id=4700:re-ranking-the-top-10-markets-for-relocation-or-expansion&catid=83:joe-tetreault-article-archive&Itemid=192The stadium situation in Tampa has already created a chorus of calls to relocate the Rays. This week the club has battled the Yankees for first place to two-thirds capacity crowds in Tropicana Field. The Rays have made clear to municipal officials in Tampa that they want a new stadium and they would require significant subsidies if not outright public funding to make a new facility a reality.

The desire of Tampa-St. Pete to field an MLB team was the driving force behind the construction of the Rays' current stadium which was completed in 1990, eight years prior to the Rays taking the field. Ironically, the presence of the Florida Suncoast Dome (since renamed twice) was used both by the White Sox and the Giants as leverage to get new stadiums approved and built by the cities they call home. Now the Rays need some juice to squeeze Tampa for a new facility.

But looking at the map, the possible locations a club might pack up and move to are few and far between. Two years ago, Maury Brown took to this space to examine the most likely relocation or expansion markets. And while he concluded then and I concur now that expansion is a highly unlikely proposition, the availability of viable locations reflects potential for growth.

The primary limiting factor that prompts us to revise our list is the worldwide economic crisis and in particular the bursting of the domestic housing bubble that occurred shortly after the original list was published. In and of itself that crisis obliterated at least one previously considered city's aspirations. And that city, knocked down several pegs from number four will lead off our list:

SELECT READ MORE TO SEE OUR REVISED TOP TEN RELOCATION OR EXPANSION MARKETS

Bob Nightengale broke the story that Alex Rodriguez has shifted agent responsibilities from Scott Boras to Pittsburgh sports attorney Jay Resinger and Washington attorney Jim Sharp. The decision reflects both Rodriguez' comfort with the work that Resigner and Sharp have done as the superstar's legal representation needs have shifted from contracts to the more complex world of dealing with the federal government as part of their on-going investigations into the use of performance enhancing drugs in baseball. In addition, Rodriguez sought Resinger's advice as he admitted his past use of PEDs.

With the two most lucrative contracts in the history of professional baseball bearing his name, Rodriguez is unlikely to ever need another contract negotiated for his services as a baseball player, reducing the utility that Scott Boras would provide. As one of the creditors in the recent Texas Rangers bankruptcy proceedings, Rodriguez has far more diverse requirements in his representation. By transitioning to someone who has been approved by the MLBPA and who can more expertly navigate these potential minefields Rodriguez is ensuring that he has the best possible advocate for the job at hand.

As baseball players find themselves contending with legal hassles that fall outside the bounds of traditional agent representation, they will invariably follow this pattern. As we see with the Roger Clemens indictment, Clemens is relying on his personal attorney rather than his agents, Randy and Alan Hendricks. It may have benefited Clemens had he retained a specialist like Resinger to handle the hearings that have now mired him in a much higher stakes legal battle.

Players such as Curt Schilling eschewed representation when negotiating their final contracts, because they were more cognizant of their goals in negotiations. That same spirit informs Rodriguez's choice. As the environment grows more complex, players will invariable follw Rodriguez' lead and find specialists who better understand their unique legal concerns. The day of the super agent is not dead. It will never be dead. But the potential for greater competition and more specialization in the marketplace will benefit players greatly.